Kick Off the New Year with These Easy Savings Tips

It's a constant on many people's lists of New Year's resolutions: Save more money.

Take these steps to help achieve your financial goals in 2022:

Set goals. Having goals can be strong motivation to save. Consider short-term goals (like a vacation), mid-term (maybe a down payment on a house), and long-term (retirement).

Track your spending. It's difficult to save more of your paycheck if you don't know where it's going. During a month, write down what you spend on housing, food, entertainment, hobbies, health insurance, clothes, etc.

Review your list for any money leaks or small expenses that are draining your savings. If you discover leaks, like impulse purchases or streaming services you no longer use, stop them and save that money instead.

Create a budget. Once you have a good idea of your expenses, develop a budget that includes savings.

A popular budget guideline is the 50-30-20 rule: 50% of your take-home pay goes toward necessities, such as housing, groceries, and health care insurance; 30% goes for wants, including entertainment and dining out; and the remaining 20% is for savings and debt payments.

Eliminate high-cost debt. Often, this can be tied to credit cards with steep interest rates. Consider: The average credit card balance is $5,315. If you paid $200 a month at the average interest rate of 16%, it would take you nearly three years to wipe out the balance. And you would have paid $1,290 in interest, according to Bankrate.com.

Wiping out card debt will boost your credit score and free up money for savings.

Reboot emergency savings. If you spent your emergency savings in the past year, work to rebuild it. Try to gradually save up to three to six months' worth of living expenses.

Keep your emergency funds in a separate, interest-bearing savings account so you're less likely to dip into it to pay regular bills.

Boost retirement savings. The IRS has raised contribution limits for retirement accounts. For 2022, you can save up to $20,500 ($1,000 more than last year) in a 457, 403(b), or 401(k) plan. If you're age 50 or over, you can contribute an extra $6,500 for an annual total of $27,000. Check out this year's contribution limits.

Even if you can't afford to max out your retirement contributions right now, every bit you save helps and lowers today's tax bill.

Get personalized assistance with your retirement savings. Contact your MissionSquare Retirement Plans Specialist.